Helped by surging sales across its Southern and Great Lakes regions, Airgas (NYSE:ARG) on Friday reported a stronger-than-expected 19% gain in third-quarter profit, leading to a higher outlook and dividend.
The Radnor, Pa.-based company posted net earnings of $55.8 million, or 65 cents a share, compared with $46.86 million, or 57 cents, in the same quarter last year.
Excluding one-time items, mostly related to litigation costs in defending itself against a hostile takeover by rival Air Products (NYSE:APD), the company earned 80 cents a share, beating average analyst estimates polled by Thomson Reuters of 79 cents.
Revenue for the distributor of industrial, medical and specialty gases was $1.03 billion, up 9.5% from $944 million a year ago, meeting the Street’s view.
Earnings were fueled by a 9% increase in same-store sales, helped by an 11% improvement in hard goods and 7% gain in gas and rent.
Airgas CEO Peter McCausland said the company is seeing improvements across the U.S., with robust sales in its Great Lakes, Mid-South, and Southwest regions. Results are also being lead by gains in its manufacturing, utilities and petrochemical customer segments.
“Although we have yet to see meaningful recovery in energy and infrastructure construction, the outlook is improving and our rental welder business is poised to return to positive same-store sales growth in our fourth quarter,” he said. “We continue to manage costs while gaining production and distribution efficiencies as volumes recover.”
Airgas updated its fiscal 2011 guidance to the range of $3.28 to $3.32 a share, which represents a 22% to 24% year-over-year improvement. It also boosted its quarterly dividend to 29 cents from 25 cents, payable on March 31 to shareholder of record on March 15.